Term paper On Analysis of Financial Statements

Pepared for Md. Lutfur Rahman Senior Lecturer and Assistant Proctor Department Of Business Administration East West University
Prepared By

Arman Khan Emu(Monno Fabrics) ID: 2006-3-10-095 Mohammad Sumsul Alam(HR Textile) ID: 2006-3-10-033 Md.Mamunur Rahman (Saiham Textile) ID: 2006-3-10-090 Nikita Mashiat(Prime Textile) 2007-1-10-140 Tanzia Islam(Dandy Dyeing) 2007-1-10-095

Date of submission : 18 April 2010

EAST WEST UNIVERSITY

Letter of transmittal
18 April 2010 Md. Lutfur Rahman Senior Lecturer and Assistant Proctor Department of Business Administration East West University Subject: Submission of term paper on Analysis of Financial Statements Dear Sir: Its our pleasure to submit a term paper on Analysis of Financial Statements, in the semester spring-2010 for the course Financial Statement Analysis. In this term paper, We have tried my best to focus relative ratios of selected companies and make comparison among them. We believe that this term paper will help us to find the current market situation of the selected companies to make investment decision. For any further clarification, We will be more than glad to comply. With Regards & Sincerity,
Arman Khan Emu 2006-3-10095 Mohammad Sumsul Alam(HR Textile) ID: 2006-3-10-033 Md.Mamunur Rahman (Saiham Textile) ID: 2006-3-10-090 Nikita Mashiat(Prime Textile) 2007-1-10-140 Tanzia Islam(Dandy Dyeing) 2007-1-10-095

Acknowledgement:
. This Report would have never seen the face of light without the help and cooperation of a number of individuals. Following few names, We must quote individually for special citation. First of all I would like to thank Md. Lufur Rahman, our academic supervisor, whose guidance and care inspired us. We would also like to thank Mr. Shamim, financial manager in Elan Corp. for his clear guidelines that enabled me to understand the structure of the paper. Despite his overdemanded schedule, he always found some time to advice & guide me in the right direction Besides, we must express our thanks to numerous academics and publishers whose papers we used to prepare the secondary analysis

Table of Contents
1.Inroduction..6 1.1 objective of the study6 1.2 scope of the study.7 1.3 limitation.7 1.4 Methodology...7 2. A short profile of the organization..7 2.1 Analysis of Common Size statement...7 2.2 Analysis of ratios.......7 2.2.1 Monno Fabrics..11 2.2.2 HR textile.16 2.2.3 Dandy Dyeing...23 2.2.4 Prime Textile .26 2.2.5 Saiham Textile..................................30 2.3 Comparison the ratios with industry.34 3.Recommendation..57 4.Conclusion.57

Executive summary
This report is prepared for the better understanding of the studies we have learned in Financial Statement Analysis in the practical industry. Here we have worked on five companies in the Textile industry find out their common size statement and the ratio they have. We first collected the data of five consecutive years from 2002 to 2006 and then analyzed them individually to find out position they have in the industry. Then we have analyzed the five companies as a whole industry. Through process of preparing the report we got a better understanding about the real world business process.

Introduction
Financial ratios are used to compare the risk and return of different firms in order to help equity investors and creditors make intelligent investment and credit decision. Such decisions require both an evaluation of changes in performance over time for a particular investment and a comparison among all firms with in a single industry at a specific point of time. The informational needs and appropriate analytical techniques used for these investment and credit decision depend on the decision makers time horizon.

1.1 objective of the study

Primary objectives To present the relative ratios among the selected companies To explain the ratios and analysis whether the ratio is performing good or bad. To find out industry average and compare the ratios with the industry to better understand. Secondary Objectives To have Knowledge about financial ratios. To improve corresponding and term writing ability. To fulfill requirement of the term paper.

1.2 scope of the study

The scope of the study is limited with the selected companies. So its is difficult to find out how the overall industry is performing. As well we conducted our analysis on the basis of anuual financial report of the companies so that ignoring the fact of economic, social and political stability of Bangladesh which can influence on investment decision.

1.3 Limitation
Sometimes it was difficult for us to understand the financial statement as there are many regulation and form regarding. We also cannot able to calculate some ratios like Capital Expenditure Ration because of scarcity of information.

1.4 Methodology
For the purpose of the term paper we only use the primary source of information that is respective annual reports of the companies. We did not use any secondary data here. The relevant information collected from the DSE library. Our academic experience of working on ratios in this course helped us a lot for conducting this analysis.

2.

A short profile of the organizations

Monno Fabrics
Vision We see business as a means to the well-being of the shareholders and all other stakeholders,
society as well as the national interest as a whole.

Mission Our Mission is to provide world class quality products to our valued customers, strictly
maintain ethical standard in business operation.

Objectives Our objectives are to conduct transparent business operation within the legal & social
framework with aims to attain the mission with a quantitative/qualitative target in business operation.

Corporate Focus Our vision, our mission and our objectives are to emphasise on the continuous
development in making value addition to our products for producing the higher end products, to keep well prepared for competitive world market. Financial Management Policy All financial policies like investments policy, dividend policy and financing policy is to maximise the value of the organisation.

Corporate Governance:
Top Management : Board of Directors
As per provisions of the Article of Association, Board of Directors hold periodic meetings to resolve issue of policies and strategies, recording minutes/decisions for implementation by the Executive Management.

Executive Management:
The Executive Management is headed by the Managing Director, the Chief Executive Officer (CEO) who has been delegated necessary and adequate authority by the Board of Directors. The Executive Management operates through further delegations of authority at every echelon of the line management. The Executive Management is responsible for preparation of segment plans/subsegment plans for every profit centres with budgetary targets for every items of goods & services and are held accountable for deficiencies with appreciation for exceptional performance.

Arman Khan Emu(Monno Fabrics) ID: 2006-3-10-095

Analysis of commonsize statement
Monno Fabrics Limited Common size for I/S
Year Sales Cost of goods sold Gross Profit operating expenses & tax Provision Operating Income Non-operating Income EBIT Interest Contribution to W.P.P.F & welfare fund EBT Tax Net Income 2002 100% 76.41% 23.59% 2.28% 21.31% 0.01% 21.33% 14.20% 0.34% 6.78% 0.00% 6.78% 2003 100% 76.38% 23.62% 16.48% 7.15% 0.02% 7.17% 0.00% 0.34% 6.83% 0.00% 6.83% 2004 100% 76.37% 23.63% 17.33% 6.30% 0.02% 6.32% 0.00% 0.35% 5.97% 0.00% 5.97% 2005 100% 76.30% 23.70% 18.23% 5.47% 0.01% 5.48% 0.00% 0.26% 5.22% 0.00% 5.22% 2006 100.00 % 77.96% 22.04% 17.21% 4.82% 0.05% 4.88% 0.00% 0.23% 4.65% 0.00% 4.65%

Gross Profit: HR Textiles gross profit is maximum in the year 2005 that is 23.70% of sales in that particular year. That means HR Textile managed its COGS most efficiently in 2006.

Operating income: HR Textiles operating income is maximum in the year 2002 that is 21.31% of sales in that particular year. That means it managed its administrative expenses most efficiently in 2002. EBT: HR Textiles EBT is maximum in the year 2003 that is 6.83% of sales in that particular year. Net Income: HR Textiles Net Income is maximum in the year 2003 that is 6.78% of sales in that particular year. Over all performance: From the income statement common size analysis it is observed that HR Textiles over all performance is good in the year 2003.

Monno Fabrics Limited Common Size

Assets Cash and Cash equivalents Inventories Loan,Advances,Deposits & prepayments Accounts Receivable Total Current Assets Net Property,Plant & Equipment Capital Work-in-Progress Total Fixed Assets Total Assets Liabilities and Stockholder's Equity Accounts Payable Short-term Borrowings 2002 0.97% 9.50% 2.11% 16.20 % 28.78 % 71.09 % 0.13% 71.22 % 100.0 0% 2.00% 15.23 % 2003 0.81% 10.45 % 1.77% 20.21 % 33.25 % 65.36 % 1.40% 66.75 % 100.00 % 5.76% 17.97 % 2004 0.88% 9.73% 2.18% 19.71 % 32.49 % 67.51 % 0.00% 67.51 % 100.00 % 3.12% 21.27 % 2005 0.30% 9.67% 3.51% 19.15 % 32.63 % 67.37 % 0.00% 67.37 % 100.00 % 1.98% 21.77 % 2006 0.59% 13.56 % 4.00% 15.93 % 34.08 % 65.92 % 0.00% 65.92 % 100.00 % 5.12% 22.21 %

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Accured Expenses Long Term Loans(Current Portion) Unclaimed Dividend Provision for Income Tax Liabilities for other Finance Total Current Liabilities Long-term Debt Deferred Liability: Gratuity payable Total Long-Term Liabilities Total Liabilities Issued and Paid-up Share Capital Share Premium Tax holiday reserve Proposed Divdend Retained Earnings Total Shareholder's Equity Total Liabilities and Shareholder's Equity

1.07% 0.00% 0.00% 0.00% 0.33% 18.63 % 39.73 % 0.00% 39.73 % 58.36 % 34.76 % 11.20 % 2.06% 1.74% 8.12% 41.64 % 100.0 0%

1.08% 1.76% 0.12% 0.54% 0.26% 27.48 % 31.41 % 0.23% 31.64 % 59.12 % 33.10 % 10.67 % 2.25% 1.65% -6.79% 40.88 % 100.00 %

0.64% 1.94% 0.20% 1.11% 0.27% 28.56 % 27.58 % 0.29% 27.87 % 56.43 % 34.20 % 11.02 % 2.33% 1.71% -5.69% 43.57 % 100.00 %

0.76% 2.19% 0.27% 0.00% 0.30% 27.28 % 24.79 % 0.36% 25.15 % 52.43 % 36.08 % 11.63 % 0.00% 2.16% -2.30% 47.57 % 100.00 %

1.07% 2.36% 0.38% 0.00% 0.30% 31.45 % 20.29 % 0.41% 20.70 % 52.15 % 36.27 % 11.69 % 0.00% 2.18% -2.28% 47.85 % 100.00 %

Investment in Fixed Asset: Maximum investment in fixed asset is in the year 2002 that is 71.22% of total asset in that particular year. Financing From outsider: its long term loan is minimum in the year 2006 that is 20.29% of total asset. Trade debt: Trade debt of HR textile is lowest in the year 2005 that is 1.98%

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Analysis of Ratio:

Activity Analysis
Ratio Inventory Turnover Avg. no. of days Inventory Receivable Turnover No. of days receivable outstanding Payable Turnover No. of days Payable outstanding Fixed Asset Turnover Total Asset Turnover 2002 2003 Activity Ratios 3.39x 3.93x 108 Days 3.32x 110 Days 17.01x 21 Days 0.67x 0.48x 93 Days 4.96x 74 Days 6.89x 53 Days 0.77x 0.50x 2004 3.94x 93 Days 5.37x 68 Days 12.59x 29 Days 0.78x 0.53x 2005 3.29x 111 Days 4.49x 81 Days 16.22x 23 Days 0.64x 0.43x 2006 3.18x 115 Days 5.97x 61 Days 7.99x 46 Days 0.72x 0.48x

From 2002 to 2004 inventory turnover ratio increase and in 2005 it started decreases again. From 2002 to 2004 average no. of days inventory in hand ratio decrease and in 2005 as the turnover ratio lower so the this ratio increases. From 2002 to 2006 receivable turnover ratio increases constantly without the year 2005. From 2002 to 2004 average no. of days receivable outstanding ratio decreases and in 2005 it increases slightly. From 2002 to 2003 payable turnover ratio decrease and from the 2005 to 2005 the ratio decrease again. The highest average no. of days payable outstanding ratio is 53 days in 2003. From 2002 to 2004 fixed asset turnover ratio increase and in 2005 it decreases slightly and again from 2006 it again increases.

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From 2002 to 2004 total asset turnover ratio increase and in 2005 it decreases slightly and again from 2006 it again increases. So, we can say that Monno Fabric manages their inventory efficiently and the company also credit management of the company is efficient. As they delaying their payables so the company has reputation in the market. Liquidity Analysis:
Year Current Quick Cash 2002 1.54x 1.03x 0.05x Liquidity Ratios 2003 2004 1.21x 1.14x 0.83x 0.03x 0.80x 0.03x 2005 1.20x 0.84x 0.01x 2006 1.08x 0.65x 0.02x

From 2002 to 2006 current ratio constatntly. From 2002 to 2006 quick ratio decrease but in year 2005 it increase a little. From 2002 to 2005 cash ratio decrease and in 2006 the ratio increases. So we can say that the companys liquidity position is not that much good.

Year Debt to Total Capital Debt to Equity

Long-Term Debt and Solvency Ratios 2002 2003 2004 2005 35.02% 31.83% 32.14% 31.35% 132.01 % 1.50x 1.50x 0.13x 120.80% 0.14x 112.12% 0.17x 97.88% 0.17x

2006 28.79% 88.82% 0.23x

Times Interest Earned Fixed Charge Coverage CFO to Debt

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From 2002 to 2003 debt to total capital ratio decline and in 2004 it started increase afterwards from 2005 to 2006 it decreases again. From 2002 to 2006 debt to equity ratio decreases consecutively. The company maintain 1.5 times interest earned ratio in 2002 afterwards, it did not pay any interest. From 2002 to 2006 CFO to debt ratio increases constantly it means CFO is increasing for the firm. Therefore, we can say the company capital structure is proper.

Profitability Analysis:
Profitability Ratios 2002 2003 23.59 23.62 % % 21.31 % 21.33 % 6.78% 6.78% 10.05 % 10.37 % 1.99% 9.34% 7.15% 7.17% 6.83% 6.83% 3.42% 7.19% 4.19% 10.34 %

Year Gross Margin Operating Margin

2004 23.63 % 6.30% 6.32% 5.97% 5.97% 3.16% 6.68% 3.62% 9.23%

2005 23.70 % 5.47% 5.48% 5.22% 5.22% 2.24% 4.71% 2.36% 6.22%

2006 22.04 % 4.82% 4.88% 4.65% 4.65% 2.21% 4.64% 2.31% 6.09%

Margin before interest and taxes Pretax Margin Profit Margin ROA ROTC ROE Return on common equity

From 2002 to 2006 gross margin more or less remain same. From 2002 to 2006 operating margin declining constantly. 14

From 2002 to 2006 margin before interest and tax also decrease consecutively. In 2003 pretax margin was highest but in the other respective years this ratio has declining trend. From 2002 to 2006 profit margin was same as pretax margin as the company did not pay the taxes in the related years. In 2002, ROA is 10.05%, decreases from 2003 to 2006. In 2002, Return on capital is 10.37%, decreases from 2003 to 2006. In 2002, ROE is 1.99%, increase in 2003 and from 2004 to 2006 it decreases. In 2002, return on common equity is 9.34%, increase in 2003 and from 2004 to 2006 it decreases.

Year Operation Leverage Effect Financial Leverage Effect Total Leverage Effect

Leverage 2002 1.11 3.14 3.48

2003 3.31 1.05 3.46

2004 3.75 1.05 3.96

2005 4.33 1.05 4.54

2006 4.57 1.04 4.74

From 2002 to 2006, OLE increase The company maintain 1.05 financial leverage over the years. From 2003 to 2006, TLE increase Therefore, we can say that Monno Fabrics has some operating leverage as well as some financial leverage. But the leverage is in the uptrend which is may not be good for the company.

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Mohammad Sumsul Alam(HR Textile) ID: 2006-3-10-033

HR Textile Limited Table 1

Year Sales Cost of goods sold Gross Profit Admnistrative & general Expense Operating Income Other income Contribution to W.P & welfare fund EBT Tax/provision for income taxd Net Income

Hr Textile Limited Income Statement 2002 2003 2004 100.00% 100.00% 100.00% 87.83% 88.64% 89.47% 12.17% 11.36% 10.53% 7.56% 4.61% 0.00% 0.23% 4.38% 0.09% 4.29% 7.62% 3.74% 0.00% 0.20% 3.54% 0.00% 3.54% 7.83% 2.70% 0.00% 0.15% 2.55% 0.22% 2.33%

2005 100.00% 86.89% 13.11% 10.16% 2.95% 0.06% 0.15% 2.80% 0.35% 2.45%

2006 100.00% 85.84% 14.16% 11.31% 2.85% 0.05% 0.15% 2.70% 0.41% 2.29%

Gross Profit: HR Textiles gross profit is maximum in the year 2006 that is 14.16% of sales in that particular year. That means HR Textile managed its COGS most efficiently in 2006. Operating income: HR Textiles operating income is maximum in the year 2002 that is 4.16% of sales in that particular year. That means it managed its administrative expenses most efficiently in 2002. EBT: HR Textiles EBT is maximum in the year 2002 that is 4.38% of sales in that particular year.

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Net Income: HR Textiles Net Income is maximum in the year 2002 that is 4.29% of sales in that particular year. Over all performance: From the income statement common size analysis it is observed that HR Textiles over all performance is good in the year 2002.

HR Textile Limited
Table -2

HR textile Common Size for Balance Sheet

Assets Current Asset Stocks and stores Trade debtors Export incentives receivables Advance, deposits and payments Cash and bank balance Deferred lease interest Total Current Assets Fixed asset Deferred lease interest Total long term asset Total Asset current liabilites: Bank overdraft- secured Liability against Trust Receipt Creditors Accrued Expenses Provision for tax Worker' participation/ Welfare funds Dues to associated companies 2002 10.02% 16.14% 13.24% 0.93% 0.20% 0.00% 40.52% 59.48% 0.00% 59.48% 100.00 % 0.00% 0.00% 5.61% 4.33% 19.52% 3.32% 0.15% 1.01% 7.56% 2003 9.70% 20.09% 11.41% 0.80% 2.17% 0.00% 44.17% 55.83% 0.00% 55.83% 100.00 % 0.00% 0.00% 4.32% 0.56% 26.53% 2.79% 0.20% 0.99% 7.68% 2004 10.91% 4.21% 5.04% 0.73% 1.38% 18.39% 40.66% 59.34% 0.00% 59.34% 100.00 % 0.00% 0.00% 5.18% 2.43% 22.92% 3.06% 0.33% 0.93% 5.43% 2005 10.03% 19.70% 4.27% 1.47% 1.89% 1.72% 39.08% 60.92% 0.00% 60.92% 100.00 % 0.00% 0.00% 4.13% 2.03% 27.40% 2.79% 0.39% 0.85% 3.12% 2006 16.55% 19.31% 2.40% 1.13% 1.85% 0.00% 41.24% 52.33% 6.43% 58.76% 100.00 % 0.00% 0.00% 3.70% 7.51% 24.81% 1.05% 0.20% 0.61% 2.22%

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Proposed dividend Total current liabilities long term liability: Long term loan Provision gratuity Total loan term liability Total liability Shareholder equity: share capital general reserve Tax holiday reserve capital reserve inappropriate profit Total shareholder equity Total liability & share holders equity

3.08% 44.57% 0.00% 0.00% 4.03% 0.00% 4.03% 48.60% 0.00% 41.07% 1.43% 2.94% 5.26% 0.70% 51.40% 100.00 %

1.96% 45.02% 0.00% 0.00% 5.26% 0.00% 5.26% 50.28% 0.00% 39.26% 1.37% 3.89% 4.47% 0.73% 49.72% 100.00 %

1.84% 42.11% 0.00% 0.00% 11.35% 0.00% 11.35% 53.45% 0.00% 36.78% 1.28% 4.12% 3.67% 0.70% 46.55% 100.00 %

2.58% 43.29% 0.00% 0.00% 13.69% 0.00% 13.69% 56.98% 0.00% 34.38% 1.20% 3.85% 2.96% 0.64% 43.02% 100.00 %

1.95% 42.05% 0.00% 0.00% 25.36% 0.58% 25.95% 68.00% 0.00% 26.01% 0.90% 2.91% 1.89% 0.28% 32.00% 100.00 %

Investment in Fixed Asset: Hr Textiles maximum investment in fixed asset is in the year 2005 that is 60.92% of total asset in that particular year. Financing From outsider: its long term loan is minimum in the year 2002 that is 4.03% of total equity. That indicate in 2002 HR Textile solely depended on equity financing. Trade debt: Trade debt of HR textile is lowest in the year 2003 that is .05% compared to total asset in that particular year

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HR Textile Limited Table 3(Activity Ratios)

Ratio Inventory Turnover Avg. no. of days Inventory Receivable Turnover No. of days receivable outstanding Payable Turnover 2002 2003 Activity Ratios 7.67x 8.57x 2004 9.66x 38 Days 9.38x 39 Days 15.59x 23 Days 1.82x 1.08x 2005 8.77x 42 Days 8.64x 42 Days 21.63x 17 Days 1.68x 1.02x 2006 6.44x 57 Days 5.29x 69 Days 37.82x 10 Days 1.73x 0.91x

48 Days 6.91x

43 Days 5.25x

53 Days 9.94x

70 Days 11.09x

No. of days Payable outstanding Fixed Asset Turnover Total Asset Turnover

37 Days 1.52x 0.90x

33 Days 1.67x 0.93x

Inventory turnover: For HR Textile highest inventory turn over occurred in the year 2004 that is 9.66x. That indicates purchase to sales process occurs 9.66 times. And one turnover took 38 days in 2004 that is minimum compared to other year. Receivable turnover: Highest receivable turnover incurred in 2004 that is 9.38 times. And it took on an average 39 days to turnover one receivable. Payable turnover: Lowest payable turnover incurred in 2002 that is 9.94 times, and one payable turnover took 37 days. Fixed and Total asset turnover: Highest fixed asset turnover incurred in 2004 that is 1.82 times. Highest Total asset turnover also incurred in 2004 that is 1.08 times. Overall performance: Activity ratios of HR Textile show that its overall performance was good in 2004.

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HR Textile Limited Table 4 (liquidity rato)

Ratio Current Quick Cash

2002 2003 Liquidity Ratios 0.91x 0.98x 0.68x 0.004 0.77x 0.048

2004 0.97x 0.71x 0.033

2005 0.90x 0.67x 0.044

2006 0.98x 0.59x 0.044

Hr textiles ability to pay its current liability using its current asset was maximum in 2003 and 2006 that is 0.98 times. Firms quick ratio and cash was also good in 2003 .

HR Textile Limited Table 5(Long- Term debt and solvency Ratios)

Ratio Debt to Total Capital Debt to Equity 2002 2003 2004 Long-Term Debt and Solvency Ratios 4.03% 5.26% 11.35% 7.84% 10.58% 24.37% 2005 13.69% 31.82% 2006 25.36% 79.26%

Times Interest Earned Fixed Charge Coverage CFO to Debt 0.98x 1.20x

0.63x 2.75x

0.24x 0.89x

0.21x 1.30x

0.10x 0.10x

In 2006 debt to capital ratio was 25.36% and it highest amount of debt in a particular year that company used in 2006.

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For every hundred Taka equity share holder bears 79.26 Taka liability that is also in 2006. Ability to pay fixed charge was highest in 2002 that is 0.98 times. Cash flow generated from operation to pay debt is highest in 2003.

HR Textile Limited Table 6(Profitability Ratios)

Ratio Gross Margin Operating Margin Pretax Margin/ EBT Profit Margin ROA ROTC ROE Return on common equity 2002 2003 Profitability Ratios 12.17% 11.36% 4.61% 4.38% 4.29% 4.04% 12.98% 7.71% 9.64% 3.74% 3.54% 3.54% 3.37% 11.13% 6.63% 8.40% 2004 10.53% 2.70% 2.55% 2.33% 2.60% 8.73% 5.91% 7.48% 2005 13.11% 2.95% 2.86% 2.51% 2.65% 9.60% 6.79% 8.49% 2006 14.16% 2.85% 2.76% 2.34% 2.41% 8.17% 7.79% 9.59%

Hr Textile gross margin in 2006 is 14.16% that is maximum compared to other years and indicate it managed its COGS most efficiently. Profitability of company from its core operation is maximum in 2002 that is 4.61% ROA is maximum in 2002 on the other hand ROE is maximum in 2006.

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HR Textile Limited Table 7 (leverage)

For one percent change in sales, EBIT could change by 4.97 times in 2006. It is maximum change in EBIT that could take place. For one percent change in EBIT, net income could change by 1.22 times in 2006. It is maximum change in net income that could take place. For one percent change in sales, net income could change by 6.04 times in 2006. It is maximum change in net income that could take place.

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Tanzia Islam(Dandy Dyeing) 2007-1-10-095

Interpretation of the ratios of Dandy Dyeing Ratio 2002 2003 Activity Ratios Inventory Turnover 1.42x 1.22x Avg. no. of days Inventory Receivable Turnover No. of days receivable outstanding Payable Turnover No. of days Payable outstanding Fixed Asset Turnover Total Asset Turnover 257 Days 36.30x 10 Days 5.21x 70 Days 1.18x 0.66x 299 Days 176.81x 2 Days 3.37x 108 Days 0.83x 0.66x

2004 1.24x 293 Days 150.39x 2 Days 3.42x 107 Days 0.79x 0.68x

2005 1.23x 296 Days 136.19x 3 Days 4.77x 76 Days 0.85x 0.71x

2006 1.27x 287 Days 170.49x 2 Days 4.32x 85 Days 1.24x 0.67x

Inventory turnover ratio of this company decreased from 2002 to 2003 in 2004 it increased again and in 2005 it decreased and 2006 it increased. The higher the ratio is better. From 2002 to 2003 average no. of days inventory in hand ratio increased and in 2004 it decreases and again at the 2005 it increased and in 2006 again decreases. From 2002 to 2006 receivable turnover ratio increased and through out the year the ratio once increased and another time it decreased. From 2002 to 2006 average no. of days receivable outstanding ratio decreased and remained constant only in 2005 it increased by 1 day. From 2002 to 2004 payable turnover ratio decreases and at the 2005 the ratio increases, it again decreases in 2006.

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From 2002 to 2006 average no. of days payable outstanding ratio increases and at the 2005 the ratio decreases it again increases in 2006. From 2002 to 2004 fixed asset turnover ratio decrease and from the 2005 to 2006 again increases. From 2002 to 2005 total asset turnover ratio increase and in 2006 it decreases again. So, we can say that Dandy Dyeing ltd. management is not consistent but the credit management of the company is efficient. As they delaying their payables so the company has reputation in the market. From the asset turnover ratios we can say dandy dyeing efficiently manage their asset.

Current Quick Cash

1.36x 0.10x 0.09x

Liquidity Ratios 2.05x 1.73x 0.16x 0.15x 0.04x 0.01x

1.51x -0.50x -0.51x

1.68x 0.07x 0.06x

The Current Ratio of this company was in an increasing trend from 2002 to 2003 and it kept falling from 2004 to 2006. The Quick ratio of the company increased from 2002 to 2003 and it drastically felled at 2003 and at 2005 it was negative but in 2006 it increased again. The Cash ratio of the company increased from 2002 to 2003 and it drastically felled at 2003 and at 2005 it was negative but in 2006 it increased again. The liquidity position of the company is not satisfactory we can say that by seeing the difference between the Quick Ratio and liquidity ratio. The quick ratio of the company is calculated by excluding inventory, and here the difference shows that there is huge amount of inventory is stored.

Long-Term Debt and Solvency Ratios 24

Debt to Total Capital Debt to Equity Times Interest Earned CFO to Debt

91.57% 1086.20% 1.19x 0.09x

96.81% 3033.46% 0.84x 0.10x

102.97% -3471.86% 0.33x 0.09x

108.11% -1332.91% 0.50x 0.06x

110.26% -1074.70% 0.10x 0.16x

The debt to capital ratio kept increasing from 2002 to 2006. The debt to equity ratio increased form 2002 to 2003 and it decreased and became negative value from 2004 to 2006. The TIE ratio decreased from 2002 to 2004 and it increased again 2005 and again decreased in 2006. The CFO to Debt ratio increased from 2002 to 2003 and it decreased from 2004 to 2005 and in 2006 it increased again. From the ratios of Dandy Dyeing we can say that the firm has less internal fund thats the reason their interest cost increased and the TIE ratio shows that their earnings is not satisfactory to support the interest payment. Their cash flow generating capacity is very low to pay the debt so we can say the long term solvency of the company is not good. Profitability Ratios 31.50% 30.03% 16.02% 16.02% 2.61% 2.61% 10.85% 13.91% 17.50% 8.17% 10.81% 10.81% -2.11% -2.11% 7.08% 9.78% -33.88% -6.56%

Gross Margin Operating Margin Margin before interest and taxes Pretax Margin Profit Margin ROA ROTC ROE Return on common equity

28.33% 3.98% 3.98% -8.23% -8.23% 2.61% 3.43% -2649.86% -24.76%

31.72% 5.77% 5.77% -5.68% -5.68% 4.18% 5.85% 105.39% -18.59%

23.98% 1.28% 1.28% -11.44% -11.44% 0.82% 1.17% 113.72% -32.29%

The gross margin of the company decreased from 2002 to 2004 and it increased in 2005 and it again decreased in 2006.

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The operating margin and the margin before interest and taxes of the company decreased from 2002 to 2004 and it increased in 2005 and it again decreased in 2006. The Pretax margin and profit margin of the company kept decreasing and became negative from 2002 to 2006. The ROA decreased from 2002 to 2004 and it again increased in 2005 and decreased in 2006. The ROTC decreased from 2002 to 2004 and it again increased in 2005 and decreased in 2006. The ROE decreased from 2002 to 2004 and it increased from 2005 to 2006. The return to common equity ratio kept decreasing from 2002 to 2006. The profitability position of Dandy Dyeing is not satisfactory the ROA and ROTC kept fluctuating over the years which increases the risk and the return to common stock holder were negative. Leverage 1.97 6.13 12.05

Operation Leverage Effect Financial Leverage Effect Total Leverage Effect

2.78 -5.12 -14.21

7.12 -0.48 -3.44

5.50 -1.01 -5.58

18.70 -0.11 -2.10

The operating leverage of the company kept increasing from 2002 to 2004 it decreased at 2005 and again it increased at 2006 The financial leverage of the company kept decreasing and became negative from 2002 to 2006. The total leverage of the company was positive at 2002 and it became negative from 2003 to 2006. A highly leveraged firm is risky but it shows good potential for future earnings with increased sales. Dandy Dying is showing highly operating leverage but their financial leverage is negative because of their negative earnings. So we can say that this firm is a highly leveraged firm with good potential of earnings.

Common size of the Dandy Dyeing

Dandy Dyeing Limited Income Statement
Year Sales and services Cost of goods sold Gross Profit Loss on sale of vechile Administritive exp and selling & distribution exp 2002 2003 2004 100.00% 100.00% 100.00% 68.50% 69.97% 71.67% 31.50% 30.03% 28.33% 0.00% 15.48% -0.10% 19.31% 0.00% 24.35% 2005 100.00% 68.28% 31.72% 0.00% 25.95% 2006 100.00% 76.02% 23.98% 0.00% 22.70%

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Operating Income(EBIT) Interest EBT Tax Net Income

16.02% 13.41% 2.61% 0.00% 2.61%

10.81% 12.92% -2.11% 0.00% -2.11%

3.98% 12.21% -8.23% 0.00% -8.23%

5.77% 11.45% -5.68% 0.00% -5.68%

1.28% 12.72% -11.44% 0.00% -11.44%

Nikita Mashiat(Prime Textile)

27

2007-1-10-140

Activity Analysis: From 2002 to 2004 inventory turnover ratio increase and in 2005 it decreases and again increases in 2006. From 2002 to 2004 average no. of days inventory in hand ratio decrease and in 2005 it increases and again decreases in 2006. From 2002 to 2004 receivable turnover ratio decreases and from the 2005 to 2006 the ratio increases. From 2002 to 2004 average no. of days receivable outstanding ratio increases and from the 2005 to 2006 the ratio decreases. From 2002 to 2004 payable turnover ratio decreases and in 2005 the ratio increases and again decreases in 2006. From 2002 to 2004 average no. of days payable outstanding ratio increases and in 2005 it decreases and again increases in 2006. So, we can say that Prime textile Spinning Mills Limited manages their inventory efficiently and the company also credit management of the company is efficient. As they delaying their payables so the company has reputation in the market.
Long Term activity ratio Fixed Asset Turnover Total Asset Turnover 2006 0.86 0.59 2005 0.75 0.55 2004 0.81 0.58 2003 0.62 0.45 2002 0.41 0.31

From 2002 to 2004 fixed asset turnover ratio increases and in 2005 it decreases and again increases in 2006. From 2002 to 2004 total asset turnover ratio increases and in 2005 it decreases and again increases in 2006. So we can say that Prime textile Spinning Mills Limited efficiently manage their long-term asset. Liquidity Analysis:
Liquidity Analysis Current Ratio Quick Ratio Cash Ratio 2006 1.10 0.52 0.02 2005 1.14 0.41 0.03 2004 1.16 0.62 0.02 2003 1.19 0.59 0.02 2002 1.18 0.41 0.02

From 2002 to 2003 current ratio increases and from 2004 to 2006 the ratio decreases. From 2002 to 2004 quick ratio increases and decreases in 2005 and again increases in 2006.

28

From 2002 to 2004 cash ratio is same and from in 2005 the ratio increases and again decreases in 2006. So we can say that the Prime textile Spinning Mills Limiteds liquidity position is not so good. Long-term debt and solvency ratio:
Lon term debt-solvency ratio Debt to Total Capital Debt to equity Ratio Times Interest Earned Fixed Charge Coverage CFO to Debt Ratio 2006 114.65% 159.05% 20.99 20.99 0.08 2005 130.82% 163.27% 21.00 21.00 0.04 2004 126.38% 170.09% 21.00 21.00 0.09 2003 130.68% 176.38% 21.00 21.00 0.08 2002 147.09% 180.22% 21.00 21.00 0.11

Capital Expenditure From 2002 to 2004 debt to total capital ratio decrease and in 2005 the ratio increases and again decreases in 2006. From 2002 to 2006 debt to equity ratio gradually decreases. The company maintains 21.00 times interest earned ratio. From 2002 to 2006 fixed charge coverage ratio remains same that is 21.00. From 2002 to 2003 CFO to debt ratio decreases, in 2004 it increases, in 2005 it decreases and again the ratio increases in 2006. Therefore, we can say the Prime textile Spinning Mills Limiteds capital structure is proper to pay its long-term obligation. Profitability Analysis:
Profitability Analysis Gross Margin Operating Margin Margin BIT Pretax Margin Profit Margin ROA Return on Capital ROE Return on Common Equity 2006 9.62% 3.00% 3.00% 2.85% 2.71% 1.78% 2.94% 3.89% 10.61% 2005 10.22% 2.10% 2,10% 2.00% 2.00% 1.16% 2.07% 2.47% 7.00% 2004 9.54% 2.17% 2.17% 2.07% 1.45% 1.27% 2.22% 2.84% 5.63% 2003 11.31% 2.48% 2.48% 2.36% 1.80% 1.10% 2.01% 2.59% 5.53% 2002 17.88% 3.83% 3.83% 3.65% 2.84% 1.19% 2.30% 2.68% 5.79%

From 2002 to 2004 gross margin decreases, it increases in 2005 and again decreases in 2006. From 2002 to 2005 operating margin decreases and in 2006 it increases. From 2002 to 2005 margin before interest and tax decreases, in 2006 it increases. From 2002 to 2005 pretax margin decreases and in 2006 it increases. From 2002 to 2004 profit margin decreases and it increases from 2005 to 2006. 29

From 2000 to 2003, ROA decreases, increases in 2004, decreases in 2005 and increases in 2006. From 2002 to 2003, Return on capital decreases, increases in 2004, decreases in 2005 and again increases in 2006. From 2002 to 2003, ROE decreases, increases in 2004, decreases in 2005 and again increases in 2006. From2002 to 2003, return on common equity decreases and from 2004 to 2006 it increases.
Leverage: Operating Leverage OLE Financial Leverage Fin Leverage Effect Total Leverage Effect 2006 3.21 1.11 3.55 2005 4.86 1.05 5.10 2004 4.40 1.49 6.57 2003 4.57 1.37 6.27 2002 4.67 1.35 6.31

From 2002 and 2004, OLE decreases and in 2005 the ratio increases and it decreases in 2006. From 2002 to 2004 financial leverage increases, in 2005 it decreases and in 2006 the ratio again increases.. From 2002 and 2003, TLE decreases, in 2004 the ratio increases and from 2005 to 2006 it decreases. Therefore, we can say that Prime textile Spinning Mills Limiteds has operating leverage as well as financial leverage.

Saiham Textile ltd (RATIO ANALYSIS) Ratio

Inventory Turnover Avg. no. of days Inventory Receivable Turnover No. of days receivable outstanding Payable Turnover No. of days Payable outstanding Fixed Asset Turnover 0.99 1.05 1.20 0.97 30 0.88

2002

2003

2004
2.045 178 37.36 9.77

2005
1.791 204 34.09 10.71

2006
1.476 247 11.06 33.00

Activity Ratios 1.721 1.772 212 24.48 14.91 206 35.68 10.23

Total Asset Turnover

0.63

0.67

0.77

0.62

0.54

Inventory turnover: For Saiham Textile highest inventory turn over occurred in the year 2004 that is 2.045x. That indicates purchase to sales process occurs 2.045 times. And one turnover took 178 days in 2004 that is minimum compared to other year.

Receivable turnover: Highest receivable turnover incurred in 2004 that is 37.36 times. And it took on an average 9.77 days to turnover one receivable.

Fixed and Total asset turnover: Highest fixed asset turnover incurred in 2004 that is 1.20times. Highest Total asset turnover also incurred in 2004 that is .77 times.

Overall performance: Activity ratios of HR Textile show that its overall performance was good in 2004. Liquidity Ratios 1.12 1.00 0.28 0.07 0.13 0.02

Current Quick Cash

1.04 0.26 0.03

0.76 0.16 0.01

1.12 0.37 0.05

Saiham textile's ability to pay its current liability using its current asset was maximum in 2002 and 2006 that is 1.12 times. Firms quick ratio good in 2006 and cash was also good in 2002 .

Debt to Total Capital Debt to Equity Times Interest Earned CFO to Debt

Long-Term Debt and Solvency Ratios 30% 11% 6% 79% 1.29 0.24 19% 1.26 3.26 10% 1.20 1.32

13% 29% 1.29 -0.19 31

4% 6% 1.29 5.27

In 2006 debt to capital ratio was 4% and it highest amount of debt in 2002 is 30% .

For every hundred Taka equity share holder bears 79 Taka liability that is also in 2002. And for every hundred taka equity share holder bears 6 taka liability in 2006. Cash flow generated from operation to pay debt is highest in 2006.

Gross Margin Operating Margin Margin before interest and taxes Pretax Margin Profit Margin ROA ROTC ROE Return on common equity

Profitability Ratios 24% 23% 23%

18%

22%

0% 5% 3% 3% 8% 13%

4% 3% 2% 7% 4% 7%

4% 3% 2% 6% 4% 8%

4% 3% 2% 5% 3% 7%

5% 4% 2% 6% 4% 8%

Saiham textile's gross margin in 2006 is 22%.in 2002 is 24% that is maximum compared to other years and indicate it managed its COGS most efficiently. ROA is maximum in 2002 on the other hand ROE is maximum in 2002.

Saiham Textile (Leverage Ratios)

Leverage

32

Operation Leverage Effect Financial Leverage Effect Total Leverage Effect

4.41 1.07 4.72

4.87 1.64 8.00

6.00 1.26 7.58

4.48 1.25 5.61

4.42 1.29 5.68

For one percent change in sales, EBIT could change by 6.00 times in 2004. It is maximum change in EBIT that could take place.

For one percent change in EBIT, net income could change by 1.29 times in 2006. It is maximum change in net income that could take place.

For one percent change in sales, net income could change by 5.68 times in 2006. It is maximum change in net income that could take place.

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Comparison the ratios with industries

For the year 2002
Activity Analysis Name of the Ratio Inventory Turnover Compared with the Industry Ave. no. of days Inventory Compared with the Industry Receivable Turnover Compared with the Industry Ave. no. of days Rec. outstanding Compared with the Industry Payable Turnover Compared with the Industry Avg. No. of days Payable Outstanding Compared with the Industry Fixed Asset Turnover Compared with the Industry Total Asset Turnover Compared with the Industry Interpretation of 2002 Monno Fabrics ; This firms inventory management is good compared to the industry average. At the same time the firm lacks efficiency in the collection of receivables and in the credit management or managing in the payables compared with the industry average. The asset turnover ratios of the firm are also in worse position compared with the industry average. Dandy Dyeing: This firm is less efficient in inventory management but they are efficient in receivables management compared to industry average. The firm also lacks in Monno Dandy HR Saiham Prime Industry Fabrics Dyeing Textile Textile Textile Avg. 3.39x 1.42x 7.67x 1.72x 1.74x 3.19x Good Bad Good Bad Bad 48 108 Days 257 Days Days 212 Days 210 Days 167 Days Good Bad Good Bad Bad 3.32x 36.30x 6.91x 24.48x 6.37x 15.48x Bad Good Bad Good Bad 53 110 Days 10 Days Days 15 Days 57 Days 49 Days Bad Good Bad Good Bad 27.34x 5.21x 9.94x 0.47x 10.74x Bad Bad Bad Bad 37 13 Days 70 Days Days 779 Days 225 Days Bad Bad Bad Bad Good 0.67x 1.18x 1.52x 0.99 0.41x 0.95x Bad Good Good Good Bad 0.48x 0.66x 0.90x 0.63 0.31x 0.60x Bad Good Good Good Bad

34

managing the payables but the fixed asst turnover ratios are in good position compared to industry average. HR Textile: This firm is in good position in managing the inventory and fixed asset turnover ratio compared to the industry average. The firm is suffering in managing the receivables and inventory compared to the industry average. Saiham Textile : This firm is only suffering through the management of inventory but other then that the firms receivables and fixed turnover ratio is in good position compared to the industry average. Prime Textile : This firm is very seriously suffering in the management of inventory, payables, receivables and in the fixed asset turnover compared to the industry average. Liquidity Analysis Monno Dandy HR Saiham Prime Industry Fabrics Dyeing Textile Textile Textile Avg. 1.54x 1.36x 0.91x 1.12 1.18x 1.22x Good 1.03x Good 0.05x Good Good 0.10x Bad 0.09x Good Bad 0.68x Good 0.004 Bad Bad 0.28 Bad 0.07 Good Bad 0.41x Bad 0.02x Bad 0.50x 0.05x

Name of the Ratio Current Ratio Compared with the Industry Quick Ratio Compared with the Industry Cash Ratio Compared with the Industry

Monno Fabrics: this firm has a very good liquidity position compare to the industry average. The firm is able to defend the indefinite cash crisis in future. Dandy Dyeing: this firm has a good current ratio but the quick ratio is bad compared to the industry average which indicates the firm has stored a huge number of inventory thats the reason of the difference between the current ratio and quick ratio. But the firm has a good cash ratio compared to the industry average indicates the can survive without the support of operatin income. HR Textile: this firms current and cash ratio is in bad position compared to industry average which is not a good indication but the quick ratio is good compared to the industry average.

35

Saiham Textile : the firm is struggling with the current and quick ratio but it has a good cash ratio compared to the industry average indicates that the firm has other sources for which it can survive for a period without the operating income. Prime Textile : this firm is in very bad liquidity position compared with the industry average.

Debt to Total Capital Compared with the Industry Debt to equity Ratio Compared with the Industry Times Interest Earned Compared with the Industry CFO to Debt Ratio Compared with the Industry

Debt Solvency Ratio Monno Dandy HR Saiham Prime Industry Fabrics Dyeing Textile Textile Textile Avg. 56.90% 91.57% 4.03% 30% 147.09% 65.86% Good 132.01% Good 1.50x Bad 0.13x Bad Bad 1086.20% Good 1.19x Bad 0.09x Bad Good 7.84% Bad Bad 1.20x Good Good 79% Bad Bad 0.24 Bad Bad 180.22% Bad 21.00x Good 0.11x Bad 297.08% 789.88% 35.49%

Dandy Dyeing : the firm is in good position in the Debt to equity Ratio but the Debt to Total Capital Times Interest Earned and CFO to Debt Ratio is in bad position Compared with the Industry average indicates the firm has less access to the internal fund and as the debt is high so their income is not good enough to pay the interest.

HR Textile ; this firm has good access to internal fund but so the debt is very low thats why the cash flow generated is enough to pay the debt compared to the industry average. Saiham Textile: the Debt to Total Capital of this firm is good position at the same timeDebt to equity Ratio is in bad position compared to the industry average. as a result the cash flow generated is not enough to repay the debt. 36

Prime Textile: except the TIE ratio this firm has bad position in the Debt to Total Capital, Debt to equity Ratio and CFO to Debt Ratio compared to the industry average. Monno Fabrics : this firm has a good debt to capital and debt to equity ratio according to industry average. At the same time TIE and CFO to Debt ratio is not good indicates the doest not hae enough earning to pay the interst.

Name of the Ratio Gross Margin Compared with the Industry Oparating Margin Compared with the Industry Margin BIT Compared with the Industry Pretax Margin Compared with the Industry Profit Margin Compared with the Industry ROA Compared with the Industry Return on Capital Compared with the Industry ROE Compared with the

Protitability Analysis Monno Dandy HR Saiham Prime Industry Fabrics Dyeing Textile Textile Textile Avg. 12.17 23.59% 31.50% % 23.86% 17.88% 21.80% Good 21.31% Good 21.33% Good 6.78% Good 6.78% Good 10.05% Good 10.41% Good 7.94% Bad Good 16.02% Good 16.02% Good 2.61% Bad 2.61% Bad 10.85% Good 13.91% Good 17.50% Good Bad 4.61% Bad 4.38% Bad 4.38% Good 4.29% Bad 4.04% Bad 12.98 % Good 7.71% Bad Good 0.00% Bad 5.05% Good 3.21% Bad 3.43% Bad 8.44% Bad Bad 3.83% Bad 3.83% Bad 3.65% Good 2.84% Bad 1.19% Bad 2.30% Bad 2.68% Bad 8.61% 8.85% 11.44% 11.39% 3.49% 4.31% 5.87%

37

Industry Return on Common Equity Compared with the Industry

9.34% Good

8.17% Bad

9.64% Good

12.66% Good

5.79% Bad

9.12%

Monno Fabrics ; this firm has a good profitability position in the industry only the retun on equity is in the bad position compared to the industry. Dandy Dyeing : the firm has good earnings position is not satisfactory as a result the return on equity is not good compared to the industry average. HR Textile : this firms earnings is not satisfactory compared to the industry average but the return to capital is good and they provide a good return to their common stock holder. Saiham Textile: this firm has agood earning capacity but the ROA and ROE and ROC is not good compared to the industry average. Despite of all this the firms return on common equity is good compared to industry. Prime Textile ; this firm is strolling with the earnings and as well as with the ROA, ROE and ROC is in the bad position compared with the industry.

Operating Leverage Operating Leverage Effect Compared with the Industry Fin Leverage Effect Compared with the Industry Total Leverage Effect Compared with the Industry

Monno Fabrics 1.11 Good 3.14 Bad 3.48 Bad

Leverage Dandy HR Dyeing Textile 1.97 Good 6.13 Good 12.05 Good 2.64x Good 1.08x Bad 2.84x Bad

Saiham Textile 4.41 Bad 1.07 Bad 4.72 Bad

Prime Textile 4.67 Bad 1.35 Bad 6.31 Good

Industry Avg. 2.96 2.55 5.88

Dandy Dyeing : this firms OLE and FLE is in good position as a result the TLE is indicating positive result but for any reason if the sales changes negatively then the profit will also decline by 12.05 times.

38

HR Textile : this firm has a good number of operating leverage but the firms financial leverage is very low as a result the TLE is low indicates that if the sales change by 1 percent positively or negatively then the profit will be affected by 2.84 times. Saiham Textile: This firm OLE, FLE, and TLE is in bad position compared to industry average. The TLE is indicates that if the sales change by 1 percent positively or negatively then the profit will be affected by 4.72 times. Prime Textile: the firms OLE and FLE are in bad position but the TLE is in good position indicates that if the sales change by 1 percent positively or negatively then the profit will be affected by 4.72 times. Monno Fabrics : this firm has a good OLE but the FLE is very high as result the TLE is bad which indicates the company has a significant possibility to be effected negatively with the change in the sale.

2003 interpretation
Activity Analysis Monno Dandy HR Saiham Prime Industry Fabrics Dyeing Textile Textile Textile Avg. 3.93x 1.22x 8.57x 1.772 2.71x 3.64x Bad Good Bad Good Good 43 93 Days 299 Days Days 206 135 Days 155 Days Good Bad Good Bad Good 2.81x 176.81x 5.25x 35.68 6.15x 45.34x Bad Good Bad Bad Bad 70 130 Days 2 Days Days 10.23 59 Days 54 Days Bad Good Bad Good Bad 10.36x 3.37x 11.09x 0.24x 6.26x Bad Good Bad Good 33 1526 35 Days 108 Days Days Days 426 Days Bad Bad Bad Good 0.77x 0.83x 1.67x 1.05 0.62x 0.99x Bad Bad Good Good Bad 0.50x 0.66x 0.93x 0.67 0.45x 0.64x Bad Good Good Good Bad

Name of the Ratio Inventory Turnover Compared with the Industry Ave. no. of days Inventory Compared with the Industry Receivable Turnover Compared with the Industry Ave. no. of days Rec. outstanding Compared with the Industry Payable Turnover Compared with the Industry Avg. No. of days Payable Outstanding Compared with the Industry Fixed Asset Turnover Compared with the Industry Total Asset Turnover Compared with the Industry

39

Monno Fabrics: the firm is suffering in the management of inventory, receivables collection, in credit management and in the asset turnover ratios compared to the industry average. Dandy Dyeing: the firm has good control over the inventory management and receivables collection the firm is also showing a good control over credit management compared to the industry. The asset turnover ratios are not satisfactory compared to industry. HR Textile ; the firm lacks in managing the inventory, collecting receivables and delaying the payment of payable but the asset turn over ratios are satisfactory compared top industry. Saiham Textile: the firms control over the inventory and receivables is not satisfactory but the asset turns over ratios are satisfactory compared to industry. The firm has no access to the payables which is not a good sign. Prime Textile : this firms efficiency over inventory and receivables is satisfactory but the payables position is not good compared to industry. The firms asset turn over ratios are good

Name of the Ratio Current Ratio Compared with the Industry Quick Ratio Compared with the Industry Cash Ratio Compared with the Industry

Liquidity Analysis Monno Dandy HR Saiham Prime Industry Fabrics Dyeing Textile Textile Textile Avg. 1.21x 2.05x 0.98x 1.00 1.19x 1.28x Bad 0.83x Good 0.03x Bad Good 0.16x Bad 0.15x Good Bad 0.77x Good 0.048 Bad Bad 0.13 Bad 0.02 Bad Bad 0.59x Good 0.02x Bad 0.49x 0.05x

Monno Fabrics: this year the liquidity position of the firm is not satisfactory although the quick ratio is in good position compared to the industry. Dandy Dyeing : the scenario of this firm this year is it has a good current ratio but the quick ratio is bad compared to the industry average which indicates the firm has stored a huge number of inventory thats the reason of the difference between the current ratio and quick ratio. But the

40

firm has a good cash ratio compared to the industry average indicates the can survive without the support of operating income. HR Textile: this year the liquidity position of the firm is not satisfactory although the quick ratio is in good position compared to the industry. Prime Textile: this year the liquidity position of the firm is not satisfactory although the quick ratio is in good position compared to the industry. Saiham Textile; this year the firm is seriously suffering through the liquidity position compared to the industry average.

Name of the Ratio Debt to Total Capital Compared with the Industry Debt to equity Ratio Compared with the Industry Times Interest Earned Compared with the Industry CFO to Debt Ratio Compared with the Industry

Monno Fabrics 54.71% Good 120.80% Good Bad 0.14x Bad

Debt Solvency Ratio Dandy HR Saiham Prime Industry Dyeing Textile Textile Textile Avg. 96.81% 5.26% 11% 130.68% 59.68% Bad 3033.46% Bad 0.84x Bad 0.10x Bad Bad 2.75x Good Good 10.58% Good Good 19% Good 1.26 Bad 3.26 Good Bad 176.38% Good 21.00x Good 0.08x Bad 461.90% 126.58% 672.06%

Monno Fabrics: this year the Debt to equity Ratio and the Debt to Total Capital ratio is in good position but the TIE and CFO to Debt Ratio is in bad position which is not a good indication compared to industry average. Prime Textile: this year the Debt to Total Capital is in bad position but the Debt to equity Ratio and the TIE ratio is in good position compared to industry average which is good. HR Textile ; this year the Debt to equity Ratio, the Debt to Total Capital ratio and CFO to Debt Ratio is in good position but the TIE ratio is in bad position which is not a good indication

41

compared to industry average. It shows the firm is not having enough cash flow to repay the debt. Saiham Textile: this year the Debt to equity Ratio, the Debt to Total Capital ratio and CFO to Debt Ratio is in good position but the TIE ratio is in bad position which is not a good indication compared to industry average. It shows the firm is not having enough cash flow to repay the debt. Dandy Dyeing: the solvency position of this firm this very is very poor compared to the industry average.

Name of the Ratio Gross Margin Compared with the Industry Oparating Margin Compared with the Industry Margin BIT Compared with the Industry Pretax Margin Compared with the Industry Profit Margin Compared with the Industry ROA Compared with the Industry Return on Capital Compared with the Industry ROE Compared with the Industry Return on Common Equity

Monno Fabrics 23.62% Good 7.15% Good 7.17% Good 6.83% Good 6.83% Good 3.51% Good 3.94% Bad 16.75% Bad 10.34%

Protitability Analysis Dandy HR Saiham Prime Industry Dyeing Textile Textile Textile Avg. 11.36 30.03% % 23.05% 11.31% 19.88% Good 10.81% Good 10.81% Good -2.11% Bad -2.11% Bad 7.08% Good 9.78% Good -33.88% Good -6.56% Bad 3.74% Bad 4.38% Bad 3.54% Good 3.54% Good 3.37% Bad 11.13 % Good 6.63% Bad 8.40% Good 4.43% Good 2.88% Good 2.06% Bad 6.79% Good 3.91% Bad 7.20% Bad 2.48% Bad 2.48% Bad 2.36% Bad 1.80% Bad 1.10% Bad 2.01% Bad 2.59% Bad 5.53% 4.98% 6.73% -0.80% 6.04% 6.21% 3.01% 2.59% 3.43%

42

Compared with the Industry

Good

Bad

Good

Good

Good

Operating Leverage Operating Leverage Effect Compared with the Industry Fin Leverage Effect Compared with the Industry Total Leverage Effect Compared with the Industry

Monno Fabrics 3.31 Good 1.05 Bad 3.46 Bad

Leverage Dandy HR Dyeing Textile 2.78 Good -5.12 Good -14.21 Good 3.03x Good 1.06x Bad 3.21x Bad

Saiham Textile 4.87 Bad 1.64 Bad 8.00 Bad

Prime Textile 4.57 Bad 1.37 Bad 6.27 Bad

Industry Avg. 3.71 0.00 1.35

Dandy Dyeing : this year the firms OLE and FLE is in good position as a result the TLE is indicating positive result but for any reason if the sales changes negatively then the profit will also decline by 14.21 times. If the sales change by 1 percent positively or negatively then the profit will be affected by 14.21 times. HR Textile : this firm has a good number of operating leverage but the firms financial leverage is very low as a result the TLE is low indicates that if the sales change by 1 percent positively or negatively then the profit will be affected by 3.21 times. Saiham Textile: This year the firms scenario is same as 2002 the firms OLE, FLE, and TLE is in bad position compared to industry average. The TLE is indicates that if the sales change by 1 percent positively or negatively then the profit will be affected by 8.00 times. Prime Textile: this year the firms OLE and FLE are in bad position as a result the TLE is in bad position indicates that if the sales change by 1 percent positively or negatively then the profit will be affected by 6.27 times.

43

Monno Fabrics: this year the firm has a good OLE but the FLE is in bad position as a result the TLE is in bad position bad which indicates the company has a significant possibility to be affected negatively in the profit 3.46 times with the change in the sale by 1 percent .

44

For the year 2004

Activity Analysis Name of the Ratio Inventory Turnover Compared with the Industry Ave. no. of days Inventory Compared with the Industry Receivable Turnover Compared with the Industry Ave. no. of days Rec. outstanding Compared with the Industry Payable Turnover Compared with the Industry Avg. No. of days Payable Outstanding Compared with the Industry Fixed Asset Turnover Compared with the Industry Total Asset Turnover Compared with the Industry Monno 3.94x Good 93 Days Good 2.60x Bad 140 Days Bad 8.67x Bad 42 Days Bad 0.78x Bad 0.53x Bad Dandy 1.24x Good 293 Days Bad 150.39 x Good 2 Days Good 3.42x Good 107 Days Bad 0.79x Bad 0.68x Bad HR 9.66x Bad 38 Days Good 9.38x Bad 39 Days Good 15.59 x Bad 23 Days Bad 1.82x Good 1.08x Good Saiha m 2.045 Good 178 Bad 37.36 Bad 9.77 Good 1.20 Good 0.77 Good Prime 3.83x Good 95 Days Good 5.66x Bad 64 Days Bad 0.11x Good 3211 Days Good 0.81x Bad 0.58x Bad Industry Avg. 4.14x 139 Days 41.08x 51 Days 6.95x 846 Days 1.08x 0.73x

Monno fabrics: The company is struggling with its short term activities. Compared with the industry average its performance on managing inventory is good but payable and receivable management is bad. Dandy dyeing: This company is doing very good with its short term activities. It is performing well in Inventory, receivable and payable management compared to the industry average. HR Textile: The company is struggling with its short term activities. Compared with the industry average its performance on managing inventory is bad and payable and receivable management is also bad. Saiham textile: This companys efficiency on short term activities is fair compared to the industry. Compared to the industry average it is good performing on its inventory and bad performing in receivable management. Prime textile: Compared to the industry average its performance in managing inventory is good, but receivables and payable is poor. So it can be said that the company is not efficient in its short term activities compared to the other companies in the industry. Monno febrics: This company is not efficient on its long term activity. Its performance on managing both fixed assets and total assets is bad compared with the industry average.

45

Dandy dyeing: This company is not efficient on its long term activity. Its performance on managing both fixed assets and total assets is poor compared with the industry average. HR Textile: This company is very efficient on its long term activity. Its performance on managing both fixed assets and total assets is good compared with the industry average. Saiham textile: This company is very efficient on its long term activity. Its performance on managing both fixed assets and total assets is good compared with the industry average.

Name of the Ratio Current Ratio Compared with the Industry Quick Ratio Compared with the Industry Cash Ratio Compared with the Industry

Liquidity Analysis HR Monno Dandy Textile 1.14x 1.73x 0.97x Bad Good Bad 0.80x 0.04x 0.71x Good Bad Good 0.03x 0.01x 0.033 Good Bad Good

Saiha m 1.04 Bad 0.26 Bad 0.03 Good

Prim e 1.16x Bad 0.62x Good 0.02x Bad

Industry Avg. 1.21x 0.49x 0.03x

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Protitability Analysis HR Saiha Prim Industry Name of the Ratio Monno Dandy Textile m e Avg. 23.63 22.69 9.54 Gross Margin % 28.33% 10.53% % % 18.95% Compared with the Industry Good Good Bad Good Bad 2.17 Oparating Margin 6.30% 3.98% 2.70% % 3.79% Compared with the Industry Good Good Bad Bad Debt Margin BIT 6.32% Solvency Ratio3.54% 3.98% 2.17 4.00% Monno Dandy HR Saiham Prime Industry % Fabrics Dyeing Textile Textile Textile Avg. Compared with the Industry Good Bad Bad Bad 11.35 Pretax Margin 5.97% -8.23% 2.55% 3.52% 2.07 1.18% Debt to Total Capital 52.86% 102.97% % 6% 126.38% 59.87% % Compared with the Compared with the Industry Good Bad Good Good Good Industry Good Bad Good Good Bad Profit Margin 5.97% -8.23% 2.33% 2.99% 1.45 0.90% 24.37 % Debt to equity Ratio 112.12% -3471.86% % 10% 170.09% -631.13% Compared with the Industry Good Bad Good Good Good Compared with the 3.11%Bad 2.61%Good 2.60% Good 2.32% 1.27 2.38% Industry ROA Good Good % Compared with the Industry - Good Good - Good Bad Bad Times Interest Earned 0.33x 1.20 21.00x 450.52% Returnthe Capital on 3.60% 3.43% 8.73% 5.87% 2.22 4.77% Compared with % Industry Bad Bad Bad Bad Good Compared Bad 0.09x Bad 0.89x Good Good Bad CFO to Debt Ratio with the Industry 0.17x 1.32 0.09x 51.17% ROE the 14.49 5.91% 3.64% 2.84 -524.59% Compared with % Bad 2649.86Good % Industry Bad Good Bad % Compared with the Industry Bad Good Bad Bad Bad Return on Common Equity 9.23% -24.76% 7.48% 7.91% 5.63 1.10% Monno Febrics: Compared to the industry average it usesnot too much debt more over its times % Compared with the its CFO Good Bad interest earned is not good. Industry to debt ratio is poor. SoGood overall itGood becameGood risky firm on a very this industry. Dandy dyeing: Its debt management is very poor. Its times interest earned is bad. HR textile: it debt for this year is good also time interest earned is nil. so it is a less risky firm. Saiham textile: This firm is using very low portion of debt in this year, but it compared to the industry it has not sufficient earnigs to pay its interest and its CFO to debt ratio is also good compared to the industry. So it can be said that the firm is able to borrow fund but not using it. Thats not a very good news for the investors. Prime textile: This firm is using very high debt in this year, but it compared to the industry it has sufficient earnings to pay its interest and its CFO to debt ratio is bad compared to the industry.

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Monno febrics: Compared to the industry its margin ratios are good but it is not doing well in managing its capital and equity. Dandy dyeing: On an average the profitability of this company is not good. HR textile: Its profit margin is good, but it is not doing well in managing its equity. Saiham textile: its all profitability ratios are good compared with the industry average. In fact it is one of the best profitable company in this industry of this year. Prime textile: the company is struggling with its management of production activity (related to cost of goods sold) but apart from that its profitability condition is good compared to the industry average.

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Operating Leverage Operating Leverage Effect Compared with the Industry Fin Leverage Effect Compared with the Industry Total Leverage Effect Compared with the Industry

Monno Fabrics 3.75 Good 1.05 Bad 3.96 Bad

Leverage Dandy HR Dyeing Textile 7.12 Bad -0.48 Good -3.44 Good 3.90x Good 1.16x Bad 4.52x Bad

Saiham Textile 6.00 Bad 1.26 Bad 7.58 Bad

Prime Textile 4.40 Good 1.49 Bad 6.57 Bad

Industry Avg. 5.03 0.90 3.84

Monno febrics: it has a good OLE, but its too high FLE and TLE made it as a risky firm in the industry. Dandy dyeing: : it has a bad OLE, but its too low FLE and TLE made it as a less risky firm in the industry. HR textile: it has a good OLE, but its too high FLE and TLE made it as a risky firm in the industry. Saiham textile:Its overall leverage scenario is poor campared with the industry average. Prime textile: it has a good OLE, but its too high FLE and TLE made it as a risky firm in the industry.

Activity Analysis Name of the Ratio Inventory Turnover Compared with the Industry Ave. no. of days Inventory Compared with the Industry Receivable Turnover Compared with the Industry Ave. no. of days Rec. outstanding Compared with the Industry Payable Turnover Monno 3.29x Good 111 Days Good 2.15x Bad 170 Days Bad 12.20x Saiha Industry Dandy HR m Prime Avg. 1.23x 8.77x 1.791 3.27x 3.67x Good Bad Good Good 296 42 111 Days Days 204 Days 153 Days Bad Good Bad Good 136.19 x 8.64x 34.09 6.51x 37.51x Good Bad Bad Bad 42 56 3 Days Days 10.71 Days 56 Days Good Good Good Good 4.77x 21.63 0.32x 9.73x

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Compared with the Industry Avg. No. of days Payable Outstanding Compared with the Industry Fixed Asset Turnover Compared with the Industry Total Asset Turnover Compared with the Industry

Bad 30 Days Bad 0.64x Bad 0.43x Bad

Good 76 Days Bad 0.85x Bad 0.71x Good

x Bad 17 Days Bad 1.68x Good 1.02x Good

0.97 Bad 0.62 Bad

Good 1143 Days Good 0.75x Bad 0.55x Bad

317 Days 0.98x 0.67x

Monno fabrics: The company is struggling with its short term activities. Compared with the industry average its performance on managing inventory is good but payable and receivable management is bad. Dandy dyeing: This company is doing good with its short term activities. It is performing well in Inventory, receivable and payable management compared to the industry average. HR Textile: The company is struggling with its short term activities. Compared with the industry average its performance on managing inventory is bad and payable and receivable management is also bad. Saiham textile: This companys efficiency on short term activities is fair compared to the industry. Compared to the industry average it is good performing on its inventory and bad performing in receivable management. Prime textile: Compared to the industry average its performance in managing inventory is good, but receivables turnover is bad and payable is good. So it can be said that the company is not efficient in its short term activities compared to the other companies in the industry. Monno febrics: This company is not efficient on its long term activity. Its performance on managing both fixed assets and total assets is bad compared with the industry average. Dandy dyeing: This company is more or less efficient on its long term activity. Its performance on managing fixed assets is bad but total assets is good compared with the industry average. HR Textile: This company is very efficient on its long term activity. Its performance on managing both fixed assets and total assets is good compared with the industry average. Saiham textile: This company is very inefficient on its long term activity. Its performance on managing both fixed assets and total assets is bad compared with the industry average. Prime textile: This company is also not very efficient on its long term activity. Its performance on managing both fixed assets and total assets is poor compared with the industry average.

Liquidity Analysis Name of the Ratio Current Ratio Compared with the Industry Quick Ratio Monno 1.20x Good 0.84x Dandy 1.51x Good -0.50x HR 0.90x Bad 0.67x Saiha m 0.76 Bad 0.16 Prim e 1.14x Good 0.41x Industry Avg. 1.10x 0.32x

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Compared with the Industry Cash Ratio Compared with the Industry

Good 0.01x Bad

Bad -0.51x Good

Good 0.04x Bad

Bad 0.01 Bad

Good 0.03x Bad

-0.08x

Monno febrics: Its current and quick ratios are higher than the industry average but it has a bad cash ratio than that of the industry. Now as most of the time we cannot convert the current assets (except cash) into cash, we consider the cash ratio as the most conservative measurement of the liquidity position of the firm. In that case we can say this firms liquidity position is not good in the industry. Dandy dyeing: Its liquidity and cash position is very good compared to the industry average. HR textile: It is struggling with liquidity position Saiham textile: this company also struggling with liquidity position, infact the worst in case of liquidity Prime textile: It has very good current and good quick ratio but its cash ratio is lower than the industry average. So we can say its liquidity position is quite bad.

Debt Solvency Ratio Monno 49.46 % Good 97.88 % Good Bad 0.17x Bad Dandy 108.11 % Bad 1332.91 % Bad 0.50x Bad 0.06x Bad HR 13.69 % Good 31.82 % Good Bad 1.30x Good Saiha m 13% Good 29% Good 1.29 Bad -0.19 Bad Prime 130.82 % Bad 163.27 % Good 21.00x Good 0.04x Bad 455.82% 27.67% -202.26% Industry Avg. 63.05%

Debt to Total Capital Compared with the Industry Debt to equity Ratio Compared with the Industry Times Interest Earned Compared with the Industry CFO to Debt Ratio Compared with the Industry

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Monno Febrics: Compared to the industry average it uses not too much debt more over its times interest earned is not good. its CFO to debt ratio is poor. So overall it became a very risky firm on this industry. Dandy dyeing: Its debt management is very poor. Its times interest earned is bad. everything is poor so its the most risky in this year HR textile: it debt for this year is good also time interest earned is nil. so it is a less risky firm. Saiham textile: This firm is using very low portion of debt in this year, but it compared to the industry it has not sufficient earnigs to pay its interest and its CFO to debt ratio is also good compared to the industry. So it can be said that the firm is able to borrow fund but not using it. Thats not a very good news for the investors. Prime textile: This firm is using very high debt in this year, but it compared to the industry it has sufficient earnings to pay its interest and its CFO to debt ratio is bad compared to the industry.

Name of the Ratio Gross Margin Compared with the Industry Oparating Margin Compared with the Industry Margin BIT Compared with the Industry Pretax Margin Compared with the Industry Profit Margin Compared with the Industry ROA Compared with the Industry Return on Capital Compared with the Industry ROE Compared with the

Protitability Analysis HR Monno Dandy Textile 23.70 % 31.72% 13.11% Good 5.47% Good 5.48% Good 5.22% Good 5.22% Good 2.18% Bad 2.46% Bad 9.43% Bad Good 5.77% Good 5.77% Good -5.68% Bad -5.68% Bad 4.18% Good 5.85% Good 105.39 % Good Bad 2.95% Bad 3.54% Bad 2.86% Good 2.51% Good 2.65% Good 9.60% Good 6.79% Bad

Saiha m 17.91 % Bad 4% Good 3% Good 2% Bad 5% Bad 3% Bad

Prime 10.22 % Bad 2.10% Bad 2.10% Bad 2.00% Good 2.00% Good 1.16% Bad 2.07% Bad 2.47% Bad

Industry Avg. 19.33% 4.07% 4.22% 1.63% 1.45% 2.39% 4.90%

25.49%

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Industry Return on Common Equity Compared with the Industry 6.22% Good 18.59% Bad 8.49% Good 7% Good 7.00% Good 2.11%

Monno febrics: Compared to the industry its margin ratios are good but it is not doing well in managing its assets, capital and equity. Dandy dyeing: On an average the profitability of this company is bad. HR textile: Its profit margin is good, and also i doing well in managing its assets, capita and lequity. Saiham textile: its all profitability ratios are good compared with the industry average.but it is not doing well in managing its assets, capital and equity. Prime textile: the company is struggling with its management of production activity (related to cost of goods sold) but apart from that its profitability condition is good compared to the industry average. Leverage Operating Leverage Operating Leverage Effect Compared with the Industry Fin Leverage Effect Compared with the Industry Total Leverage Effect Compared with the Industry Monno 4.33 Good 1.05 Bad 4.54 Bad Dandy 5.50 Bad -1.01 Good -5.58 Good HR 4.45x Good 1.18x Bad 5.23x Bad Saiha m 4.48 Good 1.25 Bad 5.61 Bad Prime 4.86 Bad 1.05 Bad 5.10 Bad Industry Avg. 4.72 0.70 2.98

Monno febrics: it has a good OLE, but its too high FLE and TLE made it as a risky firm in the industry. Dandy dyeing: : it has a bad OLE, but its too low FLE and TLE made it as a less risky firm in the industry. HR textile: it has a good OLE, but its too high FLE and TLE made it as a risky firm in the industry. Saiham textile:I it has a good OLE, but its too high FLE and TLE made it as a risky firm in the industry. Prime textile: its overall leverage scenario is poor campared with the industry average.

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For the Year 2006

1. Activity Analysis
Activity Analysis Name of the Ratio Inventory Turnover Compared with the Industry Ave. no. of days Inventory Compared with the Industry Receivable Turnover Compared with the Industry Ave. no. of days Rec. outstanding Compared with the Industry Payable Turnover Compared with the Industry Avg. No. of days Payable Outstanding Compared with the Industry Fixed Asset Turnover Compared with the Industry Total Asset Turnover Compared with the Industry Monno 3.18x Bad 115 Days Good 2.70x Bad 135 Days Bad 11.50x Good 32 Days Bad 0.72x Bad 0.48x Bad Dandy 1.27x Good 287 Days Bad 170.49 x Good 2 Days Good 4.32x Good 85 Days Bad 1.24x Good 0.67x Good HR 6.44x Bad 57 Days Good 5.29x Bad 69 Days Bad 37.82 x Bad 10 Days Bad 1.73x Good 0.91x Good Saiha m 1.476 Good 247 Bad 11.06 Bad 33.00 Good 0.88 Bad 0.54 Bad Prime 3.29x Bad 110 Days Good 6.80x Bad 54 Days Good 0.21x Good 1755 Days Good 0.86x Bad 0.59x Bad Industry Avg. 3.13x 163 Days 39.27x 59 Days 13.46x 470 Days 1.09x 0.64x

Monno Fabrics: The company is struggling with its short term activities. Compared with the industry average its performance on managing inventory and receivable is poor but its payable management is good. Dandy Dyeing: This company is doing very good on its short term activities. It is performing well in Inventory, receivable and payable management compared to the industry average. HR Textile: Compared to the industry average this company is good in Asset management it has higher turnover ratio among other companies.

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Saiham Textile: This companys efficiency on short term activities is very low compared to the industry. Compared to the industry average it is poorly performing on its receivable and payable management, though its inventory turnover is poor
Name of the Ratio Current Ratio Compared with the Industry Quick Ratio Compared with the Industry Cash Ratio Compared with the Industry Liquidity Analysis Monno Dandy HR 1.08x 1.68x 0.98x Bad Good Bad 0.65x 0.07x 0.59x Good Bad Good 0.02x 0.06x 0.04x Bad Good Good Saiham 1.12 Bad 0.37 Bad 0.05 Good Prime 1.10x Bad 0.52x Good 0.02x Bad Industry Avg. 1.19x 0.44x 0.04x

Prime Textile: Compared to the industry average its performance in managing inventory, receivables and payables is good. So it can be said that the company is efficient in its short term activities compared to the other companies in the industry. Liquidity Analysis

Monno Fabrics: The liquidity ratios of this company is poorly performing compared to industry average. Dandy Dyeing: Its liquidity position is good compared to the industry average. HR Textile: Its liquidity position is also not good in case of current ratio. But its other liquidity ratios are good compared to the industry average. Saiham Textile: It has poorly performing current and quick ratio but its cash ratio is higher than the industry average. So we can say its liquidity position is quite fair but it may face problem in converting non-cash current assets in cash in the time of necessity. Prime Textile: It has bad current and cash ratio but its quick ratio is higher than the industry average. So we can say its liquidity position is quite fair but it may face problem in converting non-cash current assets in cash in the time of necessity.

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Debt Solvency Ratio

Debt Solvency Ratio Name of the Ratio Debt to Total Capital Compared with the Industry Debt to equity Ratio Compared with the Industry Times Interest Earned Compared with the Industry CFO to Debt Ratio Compared with the Industry Monno Fabric s 47.04 % Good 88.82 % Good 0.23x Bad Dandy Dyeing 110.26% Bad 1074.70 % Bad 0.10x Bad 0.16x Bad HR Textile 25.36 % Good 79.26 % Good 0.10x Bad Saiham Textile 4% Good 6% Good 1.29 Bad 5.27 Good Prime Textile 114.65% Bad 159.05% Good 20.99x Good 0.08x Bad 4.48x 116.97% 148.27% Industry Avg. 60.21%

Monno Fabrics: Compared to the industry average it accepted level of debt more over it does not have times interest earned. Its CFO to debt ratio is poor. So overall it became a less risky firm on this industry. Dandy Dyeing: Its debt management is very poor. HR Textile The firm is using liberal debt compare to the industry and it debt to equity ratio is better. It does not have TIE ratio and CFO ratio performing poorly. Saiham Textile: The firm is using a very little number of debt compare to the industry and it debt to equity ratio is better. Though shareholders are losing some extra gain as the debt amount is small. TIE ratio performing poorly and CFO ratio is good.

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Prime Textile: This firm is using very high debt in this year, but it compared to the industry it has sufficient earnings to pay its interest cost and its CFO to debt ratio is not good compared to the industry.

Profitability Analysis
Protitability Analysis HR Monno Dandy Textil Saiham Fabrics Dyeing e Textile 14.16 22.04% 23.98% % 22% Good 4.82% Good 4.88% Good 4.65% Good 4.65% Good 2.20% Good 2.51% Bad 9.23% Bad 6.09% Good Good 1.28% Bad 1.28% Bad -11.44% Bad -11.44% Bad 0.82% Bad 1.17% Bad 113.72% Good -32.29% Bad Bad 2.85% Bad 2.55% Bad 2.76% Good 2.34% Good 2.41% Good 8.17% Good 7.79% Bad 9.59% Good Good 5% Good 4% Good 2% Good 6% Good 4% Bad 8% Good

Name of the Ratio Gross Margin Compared with the Industry Oparating Margin Compared with the Industry Margin BIT Compared with the Industry Pretax Margin Compared with the Industry Profit Margin Compared with the Industry ROA Compared with the Industry Return on Capital Compared with the Industry ROE Compared with the Industry Return on Common Equity Compared with the Industry

Prime Textile 9.62% Bad 3.00% Good 3.00% Good 2.85% Good 2.71% Good 1.78% Bad 2.94% Bad 3.89% Bad 10.61% Good

Industry Avg. 18.36% 2.99% 2.93% 0.68% 0.43% 1.89% 4.11% 27.66%

0.42%

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Monno Fabrics: Compared to the industry its margin ratios are good but it is doing bad in managing its capital. Dandy Dyeing: On an average the profitability of this company is bad. In fact it is good in terms of gross margin and ROE compare to industry. HR Textile: The company is in a good position in case of pretax margin, profit margin, ROA and ROTC. Saiham Textile: except the ROE its all other profitability ratios are good compared with the industry average. Prime Textile: the company is struggling with its management of production activity (related to cost of goods sold) but apart from that its profitability condition is very good compared to the industry average.

Leverage
Monno Fabrics 4.57 Good 1.04 Bad 4.74 Bad Leverage HR Dandy Textil Dyeing e 18.70 Good -0.11 Bad -2.10 Good 4.97x Bad 1.22x Good 6.04x Bad Saiham Textile 4.42 Bad 1.29 Good 5.68 Bad Prime Textile 3.21 Bad 1.11 Good 3.55 Good 3.58 Industry Avg. 7.17 0.91

Operating Leverage Operating Leverage Effect Compared with the Industry Fin Leverage Effect Compared with the Industry Total Leverage Effect Compared with the Industry

Monno Fabrics: It has a good OLE, but its too high FLE and TLE made it as a risky firm in the industry. Dandy Dyeing: it has efficiency in managing variable costs, but its poor FLE and TLE allows it in a bad position in the industry. HR Textile: this year it is struggling with losses, and due to its poor leverage ratios it will have to increase its sale at a huge level.

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Saiham Textile: it is managing its financial fixed cost efficiently compared with the industry, but its too high leverage ratios made it very risky. Prime Textile: Its overall leverage scenario is good campared with the industry average.

Recommendation
The analysis was based on the annual report provided by the firm. If an individual want to make an investment decision he or she should go through the ratio analysis as well as other factor to make a sound decision as ratio provide risk and return relation ship. The company should also disclose some additional information for the purpose of analysis.

Conclusion
The term paper provides an overview of ratios most commonly used in the analysis of financial statements. These ratio, classified as activity, liquidity, solvency and profitability indicators are designed to measure different aspect of a firms operating, investment and financing activities. Ratios are used to standardize financial statements across firms and over time, facilitating comparative analysis.

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